General Dynamics [GD] on Wednesday posted top and bottom-line declines in its fourth quarter but for all of 2021 sales and earnings were higher.

Major positives in the quarter and for the year included strong orders for the company’s Gulfstream business jets and robust free cash flow.

Net income in the quarter fell 5 percent to $952 million, $3.39 earnings per share (EPS), from $1 billion ($3.49 EPS) a year ago, topping consensus estimates by two cents per share. Sales dipped 2 percent to $10.3 billion from $10.5 billion.

For the year, net income rose 3 percent to $3.3 billion ($11.55 EPS) from $3.2 billion ($11 EPS) while sales edged up a percent to $38.5 billion from $37.9 billion.

GD initiated guidance for 2022, with sales expected to be between $39.2 billion and $39.5 billion and per share earnings between $12 and $12.15. Operating margin will be about 10.8 percent, the same as in 2021.

Key drivers behind the outlook include higher business jet deliveries, shipbuilding, and the Technologies segment. Lower sales are forecast for the Combat Systems segment.  Business jet sales activity in the first quarter of 2022 has been “brisk,” Phebe Novakovic, GD’s chairman and CEO, said during the company’s earnings call.

Orders in GD’s Aerospace segment, which include Gulfstream, were stellar in the quarter and full year, representing the highest totals in terms of dollar amounts and business jet units since 2008 for both periods.

In the quarter, Aerospace orders topped $4.3 billion, well above the $2.6 billion in segment revenue, and for the year, $13.3 billion in orders exceeded the $8.3 billion in sales, representing the highest orders in terms of dollars and business jets since 2008.

The long-term outlook at Aerospace is handsome, with business jet aircraft production increasing in 2023 and 2024, boosting sales $2 billion and $1.6 billion in those years sequentially, Novakovic said.

At the operating level, sales increases at Aerospace and Marine Systems were more than offset by declines at Technologies and Combat Systems. Operating income fell at all four segments.

Free cash flow in the quarter was $1.3 billion and for the year $3.4 billion. In 2022, GD expects free cash flow to exceed earnings.

Backlog at the end of 2021 stood at $87.6 billion, down 2 percent from $89.5 billion a year ago. Novakovic pointed out that GD’s Information Technology division, which is part of the Technologies segment, has $6 billion in contract wins “ensnared in protests” versus $800 million a year ago.

She also said that GDIT has $32 billion in bids outstanding, mostly for new work, related to digital modernization.